Continental Resources, Inc. seems to do things a little differently from what I’m used to.
Back in July of 2022, they sent us a drilling proposal letter for the Russell 1-36-6-7XHW (7-7N-3W) well with options, and so we signed and returned it, taking the lowest bonus ($250/acre) and highest percentage option (75% net revenue interest).
But just today we received a $7 certified mail letter from Barnes Law (their attorneys?) to the effect of “Relief Sought: Pooling (Part of a Multi-Unit Horizontal Well)” for this same well.
My question is: why would Continental send us options back in July if now they appear to be going with a fixed pooling system (disregarding what we returned to them)? And what happens next?
I ask, because when EOG Resources drilled wells in our area, they just sent us division orders and W-9 to sign and return, and that was it…
I never like to sign the letters asking which interest you would accept. If they want to lease, then they could send a proposed lease. Continental’s letter apparently did not bind them. You can lease or wait for pooling. Pros & Cons with both approaches.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
Continental filed a multi Unit on 1-18-2023, then a Pooling on 1-24-2023.
Multi unit including Section 31-T8N-3W and Sections 6 & 7 of 7N-3W includes all respondents in those Sections. There will be an allocation of percentages for each Section drilled at the hearing.
The applicant is required to name all respondents and mail notice to each.
If you leased to them… you should be okay at the terms you agreed to.
The proposal letters are sent to everyone that “might” own an interest. It is possible you own no interest or an interest that has title problems that need to be cured prior to them leasing your interest. Quite typical. I would inquire as to why they didn’t go through with the lease. They may hope you don’t reply to the pooling order and can acquire your interest at a lower royalty.